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Project: Business models for inclusive innovation

5IntroductionInclusive business (IB) and related approaches such as social entrepreneurship are high on the agenda of many public and private organisations working on issues of de-velopment and poverty reduction. he poor who live at the base of the global income pyra-mid (the so-called ‘base of the pyramid’ or BoP) lack access to markets providing essential goods and services. This is due to their low and unstable incomes, and to the fact that they often live in places with inadequate or non-existent infrastructure. There is often a lack of market information, for instance about consumer choices and prices. As a result of monopolistic or oligopolistic structures and the lack of infrastructure and consumer protection, the poor often pay a ‘poverty penalty’ which manifests itself, for exam-ple, in higher prices for products and services of a lower quality. Prices might be so high that the goods or services are unaffordable. The poor are then either priced out of the market (non-access), or they choose not to use the services (non-usage, opting out). The purchase of some goods and services can even cause a ruinous spending burden. This is the case when a good or service (e.g. healthcare) is absolute-ly necessary and the household has to cut down on pur-chases of other essential products, or has to take out a loan.1Many poor people are also excluded from services such as healthcare, education or water, when the supply of these is supposed to be guaranteed by public authorities who, for a number of reasons, fail to do meet their obligations.